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Ontario minimum wage panel to look at more than just inflation

Ontario’s new minimum wage advisory panel will look at more than just inflation when it considers how to calculate future increases, says the University of Toronto professor who will lead the initiative.

Economic growth and job productivity should also be factors, said Anil Verma, who teaches human resource management at the university’s Rotman School of Management.

Anil Verma, the chair of Ontario's new Minimum Wage Advisory Panel, is professor of human resource management at the University of Toronto's Rotman School of Management. (University of Toronto)

The six-member panel will hold public consultations across the province, engage Ontarians through the Internet and social media and conduct an in-depth review of how minimum wages are calculated in other provinces and around the world, he said. It will report in six months.

Verma, who also heads U of T’s Centre for Industrial Relations and Human Resources, acknowledged some jurisdictions use inflation to calculate minimum wage hikes because “it’s simple and easy to administer.”

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“But that ignores two other vital factors, one is the overall growth in the economy and the second is productivity on the job,” he said in an interview.

Fighting poverty will also be a goal in setting the minimum wage, which as been frozen at $10.25 for three years, Verma said.

“But it’s not a comprehensive tool to address poverty,” he warned. The government has other tools to address poverty, including taxes and income supplements, he added.

Taxation and whether the government should allow workers to keep more of what they earn is not within the panel’s mandate.

The Liberals first promised the advisory panel in their 2011 budget. Finance Minister Charles Sousa renewed the pledge as part of Premier Kathleen Wynne’s first budget in May.

But anti-poverty activists have slammed the panel as a stalling tactic.

To make up for the three-year freeze and address growing poverty, they say workers need a $14 minimum wage this year and annual increases pegged to inflation after that.

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Alberta, Nova Scotia and Yukon base annual minimum wage increases on the Consumer Price Index. Saskatchewan and Newfoundland and Labrador are also considering the move.

But Naqvi said the country’s largest and most diverse province needs “a made-in-Ontario” solution.

“We need a system that will be fair to Ontarians who live on minimum wage and predictable for businesses that create jobs in our economy,” he told reporters.

The new mechanism to set future minimum wage increases would be in sharp contrast to the “one-time, ad hoc nature that we’ve seen throughout the history of Ontario,” he added.

Ontario’s minimum wage was frozen for nine years before the Liberals came to power in 2003. Since then, it has gone from $6.85 an hour, one of the lowest in the country, to one of the highest at $10.25 in 2010. That’s a 50-per-cent increase, Naqvi said.

The government is prepared to act on the panel’s recommendations, Naqvi said. But he could not say when, as it would likely require legislative change, he added.

Although workers’ advocates wanted an immediate minimum wage hike, they support the government’s plan to end one-off increases.

“We’re pleased we’re moving from an ad hoc, political-whim-of- the-moment decision-making process to a set of principles,” said Deena Ladd of the Workers’ Action Centre, a non-profit workers’ collective.

“Ontarians want a minimum wage that is also based on set of standards that will lift them out of poverty and will be fair,” she added.

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